Can We Get Harding and Coolidge Back?

Interesting set of facts. Harding had a significant recession to deal with in 1921-22, with unemployment hitting 11% in 1921. What did he do? He cut government spending. (See chart) Coolidge followed his example when he became President in 1923. Result: Unemployment dropped to a low of 1.8% during the 1920s. (The only chart I could find shows amounts around 4-5% for the 1920s.)

Imagine that! Contrast with the 1930s with government spending unleashed yet unemployment staying very high. A bit reminiscent of our current Obama predicament.

Quote:

Harding and Coolidge: 1.8% unemployment

Although the con- ventional wis- dom - backed by President Obama and the Democrats - is that government spending must go up in hard times, the 1920s began with a depression, and spending went down. Gross National Product (GNP) fell 23.9 percent from 1920 to 1921, compared with the 23.4 percent drop from 1931 to 1932 - the biggest annual GNP decline of the Great Depression. Unemployment doubled to 11 percent in 1921, compared with 24.9 percent in 1933, the worst unemployment level of the Great Depression.

Because pumping trillions into the economy hasn't worked this time, maybe we ought to reflect on the last time government spending was under control - back in the 1920s.

In every decade except one since then, federal spending has more than doubled. The exception (1980-1990) was a decade when spending nearly doubled. How was federal spending brought under control during the 1920s, and how does that relate to dramatically lowering unemployment?

Warren G. Harding, who won the 1920 presidential election, thought companies that prospered because of the war must find peacetime business or shut down. People had to find peacetime jobs. Harding thought that the faster adjustments were made, the better off everybody would be. He understood that the top priority was the recovery of private-sector employment because government didn't have any money other than what it extracted from taxpayers. Accordingly, Harding was determined to minimize taxpayer burdens. By the time he died in August 1923, he had cut spending almost 50 percent. He cut taxes almost 40 percent, and he began paying down the national debt. There were no big-government programs.

The result? The 1920 depression was over in just 18 months. The Roaring '20s boom began in 1922. The American middle class blossomed. Millions of people acquired their first telephone, first radio and first car. The Great Migration of blacks from the South, seeking better opportunities in Northern industrial cities, gained momentum during the 1920s. As a depression fighter, Harding was much more successful than Franklin D. Roosevelt, whose presidency during the 1930s was plagued by chronic double-digit unemployment.

Vice President Calvin Coolidge succeeded Harding and won a term of his own. He, too, was a strong believer in low spending, low taxes and minimum interference with the private sector. Coolidge further cut spending, down to $2.8 billion in 1927. Altogether, spending and taxes were cut 50 percent during the 1920s, and about 30 percent of the national debt was paid off. There were budget surpluses throughout the 1920s. Unemployment fell to 1.8 percent, the lowest U.S. peacetime level in more than 100 years.

Images

Harding and Coolidge had no defense budgets. They reneged on benefits due to WWII veterans. Some historians even speculate that the U.S.' neglected defense was a primary reason Japan and Germany had such early sucess in WWII.

Yeah, I wish we had those guys back too. The first 50% they would cut would be to defense and veterans. Wouldn't that be a hoot?

In short and in general: Earn your own freakin money. Stop using the State as a predatory enterprise to confiscate from other citizens and treat their lives as your money mine.

Let's do it. Let's eliminate Medicare AND Social Security at the same time. We'll run on that platform. Who will we get to vote for us? Not the blue-hair TEA brigade, that's for sure. You're worst enemy in this case would be the people who make up the backbone of the TEA party. Do you wanna lose them? It would be lonely, being a party of one.

How about we just go back to what we were spending in 2005? Then leave it there for a few years until we stop the bleeding.

The choice is ours, but will it be the right one?

Quote:

Government and the Choice This Fall
In polls, Americans overwhelmingly prefer small government and low taxes to the alternative. Yet they've been given big government, one program at a time.

As we move into this election season, Americans are being asked to choose between candidates and political parties. But the true decision we will be making—now and in the years to come—is this: Do we still want our traditional American free enterprise system, or do we prefer a European-style social democracy? This is a choice between free markets and managed capitalism; between limited government and an ever-expanding state; between rewarding entrepreneurs and equalizing economic rewards.

We must decide. Or must we?

In response to what each of us has written in the preceding months, we have heard again and again that the choice we pose is too stark. New York Times columnist David Brooks (no relation) finds our approach too Manichaean, and the Schumpeter columnist in The Economist objected that, "You can have a big state with a well-functioning free market."

Data support the proposition that Americans like generous government programs and don't want to lose them. So while 70% of Americans told pollsters at the Pew Research Center in 2009 they agreed that "people are better off in a free market economy, even though there may be severe ups and downs from time to time," large majorities favor keeping our social insurance programs intact. This leads conventional thinkers to claim that a welfare state is what we truly want, regardless of whether or not we mouth platitudes about "freedom" and "entrepreneurship."

Images

The wars debt is a minor part of Federal expenditures. You guys need a better talking point as Obama's domestic expenditures have far eclipsed the cost of the wars.

Minor? Not when you consider how much a wounded veteran costs the government, averaged over their lifetime. Add to that the money that we've literally poured into reconstruction of the country. And only a single US Oil company got rights to drill, Halliburton. Who would have figured. That's neocon business model for you there, as imagined by GWB. Pour tons of resources into a totally fabricated danger, and obtain a sole source contract for the VP's old company.

Besides, the money that Obama has spent went to people right here in the US. We've needed it to prevent Americans from being thrown out into the streets, and left destitute. Children going hungry. That's the alternative to the stimulus. The money GWB burned through went to help Afghanis and Iraqis. After we bombed their homes to the ground. Which would you choose to do for your country. Help your countrymen, or help Iraqis?

this thread proves how amazingly easy it is to fool all those
"conservatives" who appear eager to consume stuff made up
by the Moonies.

1.8% unemployment in Coolidge's term ? lol.

Indeed BF48, indeed an interesting set but of lies not of facts.

As I stated in the OP it appears the unemployment rate was 4%-5% during the 1920's, an era of cutting government expenditures. Where the 1.8% came from is not apparent.

The Big Lie we're all having to deal with now is that massive spending by Obama and the Dems will result in lower unemployment. As proved in the 1930's it doesn't work, yet here we are repeating the insanity.